SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT OR [ ] TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended October 31, 1996 Commission File No. 33-21443
----------------------
GALT FINANCIAL CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Colorado 87-1077246
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(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
26 West Dry Creek Circle, Suite 600
Littleton, Colorado 80120
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(Address of principal executive offices) (Zip Code)
(303) 794-9450
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(Registrant's telephone number,
including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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As of the end of the quarter, 17,816,667 shares of common stock were
outstanding.
<PAGE>
PART I
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Item 1. Financial Statements
- ------ -------------------
Unaudited financial statements for the quarter covered by this report
are attached hereto.
Item 2. Management's Discussion and analysis or Plan of Operation
- ------ ----------------------------------------------------------
The Company currently has no business operations. The Company has no
significant cash or other assets. Certain persons who are either
shareholders or officers of the Company have agreed to advance funds
to the Company as needed to maintain its corporate existence, continue
its SEC filings and to pursue a business acquisition.
The Company is negotiating an Exchange Agreement with International
Capital Growth, Ltd., ("ICG") which includes a Private Placement of
ICG's common stock offering and a reverse split of the company's
common stock.
The Exchange Agreement is subject to approval by the Board of
Directors of both companies, Galt shareholders approval, and the
execution of acceptable definitive agreements.
PART II
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Item 1. Legal Proceedings
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None.
Item 2. Changes in Securities
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None.
Item 3. Defaults Upon Senior Securities
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None.
Item 4. Submission of Matters to a Vote of Security Holders
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None during the quarter covered by this report.
<PAGE>
Item 5. Other Information
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None.
Item 6. Exhibits and Reports on Form 8-K
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None.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized:
GALT FINANCIAL CORPORATION
Date: December 12, 1996 /s/ EARNEST MATHIS
-----------------------------------
Earnest Mathis
Chief Executive Officer and
Principal Financial Officer
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors
Galt Financial Corporation
The accompanying condensed balance sheet of Galt Financial Corporation as of
October 31, 1996 and the related condensed statements of operations and cash
flows for the three and nine months ended October 31, 1996 and 1995 were not
audited by us and, accordingly, we do not express an opinion on them.
Angell & Deering
Certified Public Accountants
Denver, Colorado
December 9, 1996
F-1
<PAGE>
GALT FINANCIAL CORPORATION
CONDENSED BALANCE SHEET
OCTOBER 31, 1996
(Unaudited)
ASSETS
Current Assets:
Cash $ 1,842
---------
Total Assets $ 1,842
=========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable - trade $ 88
Accrued interest - related parties 3,232
Notes payable - related parties 34,000
---------
Total Current Liabilities 37,320
---------
Stockholders' Equity (Deficit):
Preferred stock: $.001 par value,
20,000,000 shares authorized, none
issued or outstanding --
Common stock: $.0001 par value,
100,000,000 shares authorized,
17,816,667 shares issued and
outstanding 1,782
Additional paid in capital 247,299
Accumulated deficit (284,559)
---------
Total Stockholders' Equity
(Deficit) (35,478)
---------
Total Liabilities and Stockholders'
Equity (Deficit) $ 1,842
=========
The accompanying notes are an integral part
of these condensed financial statements.
F-2
<PAGE>
GALT FINANCIAL CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
October 31, October 31,
--------------------------------- --------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue $ -- $ -- $ -- $ --
Operating expenses 1,352 5,196 15,035 15,370
----------- ----------- ----------- -----------
Loss From Operations (1,352) (5,196) (15,035) (15,370)
----------- ----------- ----------- -----------
Other Income (Expense):
Gain on disposal of
subsidiary -- -- -- 68,663
Interest expense (963) (330) (2,318) (486)
----------- ----------- ----------- -----------
Total Other Income
(Expense) (963) (330) (2,318) 68,177
----------- ----------- ----------- -----------
Net Income (Loss) $ (2,315) $ (5,526) $ (17,353) $ 52,807
=========== =========== =========== ===========
Net Income (Loss) Per
Share of Common Stock $ -- $ -- $ -- $ --
=========== =========== =========== ===========
Weighted Average Number
of Common Shares
Outstanding 17,816,667 17,816,667 17,816,667 17,816,667
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part
of these condensed financial statements.
F-3
<PAGE>
GALT FINANCIAL CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED OCTOBER 31, 1996 and 1995
(Unaudited)
1996 1995
-------- --------
Cash Flows From Operating Activities:
Net income (loss) $(17,353) $ 52,807
Adjustments to reconcile net income
(loss) to net cash (used) by
operating activities:
(Gain) on disposal of subsidiary -- (68,663)
Changes in assets and liabilities:
Increase in accounts payable 10 2,009
Increase in accrued interest 2,318 486
-------- --------
Net Cash (Used) By Operating
Activities (15,025) (13,361)
-------- --------
Cash Flows From Investing Activities:
Disposal of subsidiary -- (1,000)
-------- --------
Net Cash (Used) By Investing
Activities -- (1,000)
-------- --------
Cash Flows from Financing Activities:
Proceeds from related party loans 15,400 12,800
Repayment of related party loans (1,700) --
-------- --------
Net Cash Provided By Financing
Activities 13,700 12,800
-------- --------
Net (Decrease) in Cash and
Cash Equivalents (1,325) (1,561)
Cash and Cash Equivalents at
Beginning of Period 3,167 1,792
-------- --------
Cash and Cash Equivalents at
End of Period $ 1,842 $ 231
======== ========
Supplemental Disclosure of Cash Flow
Information:
Cash paid during the period for:
Interest $ -- $ --
Income taxes -- --
The accompanying notes are an integral part
of these condensed financial statements.
F-4
<PAGE>
GALT FINANCIAL CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. The accompanying financial information of the Company is prepared in
accordance with the rules prescribed for filing condensed interim financial
statements and , accordingly, does not include all disclosures that may be
necessary for complete financial statements prepared in accordance with
generally accepted accounting principles. The disclosures presented are
sufficient, in management's opinion, to make the interim information
presented not misleading. All adjustments, consisting of normal recurring
adjustments, which are necessary so as to make the interim information not
misleading, have been made. Results of operations for the nine months ended
October 31, 1996 are not necessarily indicative of results of operations
that may be expected for the year ending January 31, 1997. It is
recommended that this financial information be read with the complete
financial statements included in the Company's Annual Report on Form 10-
KSB for the year ended January 31, 1996 previously filed with the
Securities and Exchange Commission.
2. The Company intends to enter into an Exchange Agreement with International
Capital Growth, Ltd. ("ICG"). Prior to the exchange ICG will conduct a
Private Placement of its common stock offering a minimum of 1,000,000
shares (the "Minimum Offering") and a maximum of 2,000,000 shares (the
"Maximum Offering") at an offering price of $2.75 per share.
Upon closing of the Minimum Offering the Company will exchange 14,415,000
shares of its common stock for all of the issued and outstanding common
stock of ICG. The Company will also exchange its preferred stock for all of
the issued and outstanding preferred stock of ICG on a share for share
basis. Subsequent to completion of the Exchange Agreement the Private
Placement will continue and the companies will proceed with the Maximum
Offering. If the Maximum Offering is completed (of which there can be no
assurance) an additional 1,000,000 shares of the Company's common stock
will be issued and outstanding.
Simultaneously with the Exchange the Company will effect a reverse stock
split of 1 for 59.38889. The reverse stock split will reduce the Company's
issued and outstanding common stock to 300,000 shares. The Company will
change its name to Capital Growth Holdings, Ltd. after the Exchange is
completed.
The Exchange Agreement is subject to approval by the Board of Directors of
both companies, Galt shareholders approval, and the execution of acceptable
definitive agreements.
F-5
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> OCT-31-1996
<CASH> 1,842
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,842
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,842
<CURRENT-LIABILITIES> 37,320
<BONDS> 0
0
0
<COMMON> 1,782
<OTHER-SE> (37,260)
<TOTAL-LIABILITY-AND-EQUITY> 1,842
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 15,035
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,318
<INCOME-PRETAX> (17,353)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (17,353)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
